Benchmarks end slightly higher ahead of state assembly election results

Indian equity benchmarks ended the session slightly in the green terrain on Friday with Nifty recapturing its crucial 6,250 mark ahead of state assembly election results due on Sunday. Earlier, sentiments remained up-beat on report that the gross direct tax receipts of the government in April-November period this year rose by 13.18% from a year ago to Rs 3.7 lakh crore, a bit lower than the 18% growth officially projected. Net direct tax receipts in the same period rose 14.6% to Rs 3.1 lakh crore. However, profit booking was witnessed at higher levels and benchmarks turned red in noon deals. Some concern also came in after global ratings agency Moody’s cautioned that there could be downward pressure on India’s sovereign rating if growth weakens further and high inflation persists.

The frontline gauges soon recovered as sentiments got bolstered in last leg of trade after sugar stocks like, Balrampur Chini, Shree Renuka Sugars, Bajaj Hindusthan, Triveni Engineering, Rana Sugars all edged higher on report that the sugar industry will be getting a loan of Rs 7,200 crore from the banks, for which the Centre will give an interest subvention of 12%. Some support also came in from report that foreign institutional investors (FIIs) have continued to pour money into the Indian equity markets with their net inflow in calendar year (CY) 2013 crossing a milestone figure of Rs 100,000 crore on December 5, 2013. As per official data, the inflows have touched a whooping Rs 100,432 crore on year-to-date (YTD) basis.

Positive opening in European counters too supported the domestic markets with CAC, DAX and FTSE all edging higher in early deals ahead of monthly jobs report from the US. Moreover, most of the Asian equity benchmarks ended the session in the red as investors remained on sidelines ahead of the U.S. jobs data due later in the day. 

Back home, strengthening rupee too aided the sentiments. Indian rupee was at Rs 61.65 compared with previous close of Rs 61.75 per dollar at the time of equity markets closing. Rally in PSU oil marketing companies too supported the sentiments. Stocks like BPCL and IOC edged higher in early deals after diesel demand has declined this fiscal as monthly price hikes and increased power generation clipped consumption of India’s most consumed fuel. Stocks related to public sector undertaking too remained on buyers’ radar after strong demand from investors for follow on public offer of state-run Power Grid Corporation of India.

The NSE’s 50-share broadly followed index Nifty rose by around twenty points to regain its psychological 6,250 level, while Bombay Stock Exchange’s sensitive Index -- Sensex surged by around forty points to end near the psychological 21,000 mark.

Broader markets too traded with traction and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,328 shares on the gaining side against 1,178 shares on the losing side, while 160 shares remained unchanged.

Finally, the BSE Sensex gained 38.72 points or 0.18%, to settle at 20996.53, while the CNX Nifty added 18.80 points or 0.30% to settle at 6,259.90.

The BSE Sensex touched a high and a low of 21049.84 and 20922.45, respectively. The BSE Mid cap index was up by 0.49%, while the Small cap index gained 0.37%.

The top gainers on the Sensex were Tata Power up 5.57%, Coal India up 3.58%, NTPC up 3.44%, Hero MotoCorp up 2.33%, and ONGC up 1.31%, on the flip side HDFC down 1.65%, Hindalco Inds down 1.07%, Hindustan Unilever down 0.98%, Bharti Airtel down 0.98%, and HDFC Bank down 0.79%, were the top losers on the index.

On the BSE Sectoral front, Power up by 2.27%, PSU up by 1.59%, Consumer Durables up by 1.24%, Capital Goods up by 0.81%, and Metal up by 0.63%, were the top gainers, while, IT down by 0.06%, was the only loser on the sectoral front.

Meanwhile, concerned over the growing raw material imports for electronics and telecommunications sectors, Prime Minister Manmohan Singh has expressed the need to develop a strong domestic manufacturing base in electronics and telecommunications in order to mitigate burden of growing imports for these sectors. India is expected to import electronics products worth around $300 billion, which will be more than the value of the country's imports of petroleum products.

Highlighting the need to avoid the situation where the country can face difficulties in financing these huge imports, Prime Minister said that India should have manufacturing facilities that help in balancing trade in electronics products and are a part of global supply chains. Talking about policies in these sectors, Manmohan Singh added that National Telecom Policy 2012 has brought clarity on number of issues in the sector and the Department of Telecommunications has already started issuing Unified Licenses and will soon issue the Merger and Acquisition guidelines. Manmohan Singh has suggested the Telecom Ministry's plan to provide 3G connectivity with computers in order to modernise systems and revolutionize the delivery of education.

The government has noted that it has left no stone unturned in trying to create attractive and level playing field for telecom and electronics segment. It has also brought in clarity in the entire Information Communication Technology and Electronics (ICTE) sector by introducing new policies.

The CNX Nifty touched a high and low of 6,275.35 and 6,230.75 respectively.

The top gainers on the Nifty were Tata Power Company up by 6.65%, Coal India up by 4.30%, NTPC up by 3.93%, Axis Bank up by 3.79%, and PNB up by 3.55%, On the other hand, HDFC down by 1.42%, Ranbaxy Laboratories down by 1.19%, Hindalco Industries down by 1.03%, Infosys down by 0.73%, and Hindustan Unilever down by 0.71%, were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.28%, Germany's DAX was up by 0.56%, and United Kingdom's FTSE 100 was up by 0.38%.

The Asian markets concluded Friday’s trade mostly in red while stability in the yen allowed Japanese stocks to move higher at the end of a bad week for the Nikkei Average. The Japanese government unveiled details of a ¥5.5 trillion ($53.9 billion) spending package to mitigate the expected drag on the economy from an upcoming sales tax increase in April, bundling steps to encourage corporate investment and employment, as well as handouts for low-income households. Prime Minister Shinzo Abe had instructed his government to compile the package in October when he decided to raise the 5% sales tax to 8% in April. The measures will have an ¥18.6 trillion economic impact and should lift gross domestic product by 1% point.

Indonesia may see less foreign capital inflows next year, which could affect its ability to fill the gap in its external balance, as the US Federal Reserve likely begins curbing its stimulus spending. Deputy Finance Minister Bambang Brodjonegoro stated that the Fed’s reduction of purchases of US bonds could destabilize financial markets in emerging nations, including Indonesia’s. Philippines CPI rose to a seasonally adjusted annual rate of 0.4%, from 0.1% in the preceding quarter while Taiwanese CPI rose to a seasonally adjusted annual rate of 0.67%, from 0.64% in the preceding quarter.